On June 10, 2013, plaintiff Jerome Cromwell (“Cromwell”) filed a Second Amended Complaint against the New York City Health and Hospitals Corporation (“HHC”) and Alan D. Aviles, HHC’s chief executive officer (collectively, “defendants”). Dkt. 38. Cromwell seeks to recover, on his own behalf and that of a putative class of employees, unpaid wages allegedly owed to hourly employees for work performed before and after scheduled shifts, and during meal periods and breaks. Cromwell asserts that defendants deprived him and similarly situated HHC employees of overtime and gap-time pay, in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq., and/or New York Labor Law (“NYLL”) §§ 191 et seq.
On July 8, 2013, defendants moved to dismiss Cromwell’s NYLL claims against HHC in their entirety, on the ground that HHC is a political subdivision of New York State and therefore exempt from the NYLL’s wage provisions. Dkt. 42 (“Def. Br.”). On July 22, 2013, Cromwell submitted his opposition. Dkt. 43 (“PL Br.”). On July 29, 2013, defendants replied. Dkt. 44 (“Def. Rep. Br.”).
For the reasons that follow, the Court grants defendants’ partial motion to dismiss.
1. Factual Allegations
Between October 10, 1989, and February 1, 2010, Jerome Cromwell worked as a hospital police officer at Woodhull Medical and Mental Health Center, a medical facility of the HHC.
Between May 2006 and February 2010 (the “Relevant Time Period”), Cromwell typically worked five days per week between 11 p.m. and 7 a.m., totaling 37.5 hours of scheduled work. Id. ¶ 71. Cromwell alleges that, during 35% of his workweeks, he worked an additional 7.5-hour shift, resulting in a total of 45 hours worked during those weeks. Id.
Cromwell alleges that he worked these uncompensated hours as a result of HHC policy. For instance, Cromwell asserts, HHC had a “Meal and Break Deduction Policy” under which HHC’s timekeeping system automatically deducted time from employees’ paychecks each day for meals, breaks, and other deductible periods of time. Id. ¶¶ 89-90. For each shift that was long enough for a meal break, 30 minutes was automatically deducted from employees’ pay base. Id. ¶ 91. Cromwell claims that he and other members of the class he seeks to represent performed work during these automatically deducted breaks, and that defendants failed to prohibit employees from working during these breaks. Id. ¶ 92-96.
Another relevant HHC policy is the “Unpaid Pre- and Post-Schedule Work Policy.” Id. ¶ 122. Under this policy, Cromwell claims, he and other employees were permitted to perform work before and after the end of their scheduled shifts, but were not permitted to record this work so as to be paid for it. Id. ¶¶ 125-26. Cromwell also alleges that defendants failed to prohibit employees from completing work before and after their scheduled shifts. Id.n 129-50.
In total, Cromwell estimates, HHC caused him to work six hours and 40 minutes of uncompensated time during weeks in which he worked the standard five shifts, and seven hours and 40 minutes of uncompensated time during the 35% of weeks in which he worked an extra shift. For the weeks in which he worked an extra shift, Cromwell asserts he should have been paid at the overtime rate for the entire seven hours and 40 minutes, because all of his “uncompensated hours were in excess of 40.” Id. ¶¶ 75-78. For the weeks in which he worked just five shifts, Cromwell asserts he should have been paid at his regular hourly rate for 2.5 hours, bringing his weekly hours to 40, and at the overtime rate for the balance of four hours and 10 minutes. Id. Back-pay for the 2.5 hours needed to reach a 40-hour week is called “gap-time” compensation. See Nakahata v. N.Y. Presbyterian Healthcare Sys., Inc.,
In money damages, Cromwell seeks: (1) an award of the value of “unpaid wages and overtime”; (2) “liquidated damages
II. Applicable Legal Standard
To survive a motion to dismiss under Rule 12(b)(6), a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
In considering a Rule 12(b)(6) motion, the Court “must confíne its consideration to facts stated on the face of the complaint, in documents appended to the complaint or incorporated in the complaint by reference, and to matters of which judicial notice may be taken.” Leonard F. v. Israel Disc. Bank of N.Y.,
III. Discussion
Defendants’ motion to dismiss presents a question of law: Is HHC a political subdivision of New York State and therefore exempt from the NYLL?
Public benefit corporations like HHC are not automatically considered political subdivisions for all purposes under New York law. See John Grace & Co., Inc. v. State Univ. Constr. Fund,
In Clark-Fitzpatrick, the New York Court of Appeals held that the Long Island Railroad Company (“LIRR”) should “receive the same immunity from punitive damages as do the State and its political subdivisions.”
By contrast, in John Grace, the Court of Appeals held that a public benefit corporation, the State University Construction Fund (“Fund”), was distinct from New York State. It therefore did not have to follow various laws requiring state agencies to adjust building contracts to reflect increased steel and petroleum prices.
The guiding question under New York law is thus whether the entity is sufficiently like the State for the purpose at issue, such that it should be treated like the State for that purpose. See John Grace,
No New York State court has squarely addressed this question. However, courts in this district have twice dismissed NYLL claims against HHC on the grounds that HHC is a political subdivision of the State for NYLL purposes. See Ali v. N.Y.C. Health & Hosps. Corp., No. 11 Civ. 6393(PAC),
In Drayton, Judge Rakoff concluded that “New York courts are overwhelmingly likely to hold that HHC is a political subdivision for purposes of [the NYLL].”
In addition to these considerations, exposing HHC to suit under the NYLL would potentially subject HHC to paying,
Exempting HHC from the NYLL is further consistent with the law’s overall treatment of HHC, including in the employment context. HHC’s employees are “subject to [Art. 14] of the civil service law and for all such purposes” are deemed “public employees.” HHC Act § 7390(5). The “Public Employees’ Fair Employment Act,” also known as the “Taylor Act,” N.Y. Civil Service Law §§ 200 et seq., which was enacted to “promote harmonious and cooperative relationships between government and its employees,” covers HHC employees. See House v. N.Y.C. Health & Hosps. Corp.,
Finally, HHC is deemed a political subdivision under federal employment law. The National Labor Relations Act, 29 U.S.C. §§ 151 et seq. (“NLRA”), excludes from its definition of an employer “any State or political subdivision thereof.” 29 U.S.C. § 152(2). In Muhlrad v. Mitchell, No. 96 Civ. 3568(DLC),
The Court’s particularized inquiry thus reveals that HHC: (1) was statutorily created to serve an essential public and governmental function; (2) receives substantial public funding; and (3) is widely characterized as a political subdivision and public employer under both state and federal law. Additionally, the fact that employers covered by the NYLL are subject to paying 100% in liquidated damages, on top of liability for back wages, favors exempting HHC, particularly given HHC’s public mission and funding. The Court thus agrees that it would be incongruous to “carve out an isolated area of law in which HHC is not considered a governmental entity.” Drayton,
For the reasons stated in the foregoing, the Court holds that HHC is a political subdivision of New York State for NYLL purposes, and grants HHC’s motion to dismiss plaintiffs’ NYLL claims with prejudice. The Clerk of Court is directed to terminate the motion pending at docket number 40.
Defendants are directed to submit an answer to the FLSA overtime claims contained in the Second Amended Complaint by October 30, 2013. The parties are directed to meet and confer by November 6, 2013 and to submit, by November 13, 2013, a joint proposed Case Management Plan, under which fact discovery is to be completed by four months from today.
SO ORDERED.
Notes
.Cromwell’s original Complaint was filed on May 30, 2012. Dkt. 1. On December 10, 2012, he filed a First Amended Complaint ("FAC”). Dkt. 25. On May 5, 2013, the Court dismissed the FAC's FLSA claims, because the FAC failed to allege any particular workweek involving uncompensated overtime during which Cromwell worked more than 40 hours. Dkt. 37 (citing Lundy v. Catholic Health Sys. of Long Island Inc.,
. The Court’s account of the underlying facts in this case is drawn from the Second Amended Complaint. Dkt. 38 ("SAC”).
. HHC hospitals include: (1) Bellevue Hospital Center; (2) Kings County Hospital Center; (3) Jacobi Medical Center; (4) Elmhurst Hospital Center; (5) Harlem Hospital Center; (6) Coler-Goldwater Specialty Hospital and Nursing Facility; (7) Metropolitan Hospital Center; (8) Lincoln Medical and Mental Health Center; (9) North Central Bronx Hospital; (10) Coney Island Hospital; (11) Woodhull Medical and Mental Health Center; and (12) Queens Hospital Center. SAC ¶ 17.
. For instance, Cromwell asserts that “HHC is not a political subdivision as intended under the New York Labor Law.” SAC ¶21. That is a legal conclusion the Court need not credit on HHC’s motion to dismiss.
. With its motion to dismiss, HHC filed a Declaration of Benjamin Welikson with four exhibits: (A) the Citywide Collective Bargaining Agreement; (B) the Operating Agreement between HHC and N.Y. City; (C) HHC's Workers’ Compensation Self-Insurance form; and (D) the appellant’s brief in Clark-Fitzpatrick, Inc. v. Long Island R.R. Co.,
. Plaintiff argues that the Court should not consider HHC's budget figures on a motion to dismiss. See Pl. Br. at 21. However, in his SAC at ¶ 46, plaintiff himself draws upon those disclosures, stating: "according to the New York City Council’s HHC Budget Overview for 2011, approximately 80% of the $6.7 billion operating budget was derived from third party revenue.” The HHC Budget is therefore “incorporated in the complaint by reference.” See Leonard P.,
. One court has held that HHC is not a political subdivision for purposes of NYLL. See Massiah v. MetroPlus Health Plan, Inc.,
